Representative Payee Account

Posted By: Bestaggs

Representative Payee Account - 08/26/09 03:01 PM

We have a discussion going to which there are two views. Your help would be invaluable.

The question centers around whether or not the Beneficiary on a Representative Payee account is allowed to have information on the account. We have a Beneficiary calling who wants to know the balance, how much the checks were, and to whom the checks were written.

One view says the Beneficiary can have information but they cannot have control over the funds. Others have a different opinion.
Posted By: BrendaC

Re: Representative Payee Account - 08/26/09 05:02 PM

I would refer the beneficiary to the rep payee for account information.
Posted By: Playin 88-Keys

Re: Representative Payee Account - 08/26/09 05:24 PM

Good Afternoon,

We are having issues with Representative payee accounts as well. We have found out (according to BankersOnline) that the individual that receives SSI Payments (I believe you are referring to as the Beneficiary) should actually be listed as the "Owner" of the funds and is not entitled to Withdrawal rights, however, I personally do feel they should have access to the account information. Hope that helps a little, if you would like the materials we used to base our procedures on please contact me via this forum.

We now are currently trying to figure out how since we list the individual as the "Owner" of the account, how to prevent him/her from coming into the bank to withdraw funds. How will our tellers know the situation and reframe from acting on the customers request to withdraw funds?

Thanks,
Posted By: BrendaC

Re: Representative Payee Account - 08/26/09 05:29 PM

There is a Guide for Representative Payees on the ssa.gov website that provides guidance on setting up the accounts.

How funds should be held
It is a good idea to ask us to directly deposit monthly benefits into a bank account. We recommend that you hold benefits in a checking or savings account to protect against loss or theft. Also, do not mix the beneficiary’s funds with your own or other funds.

If any money is left after meeting the beneficiary’s day-to-day and personal needs, it must be saved. The preferred ways of saving is U.S. Savings Bonds or an interest-paying bank account that is insured under either federal or state law. Interest earned belongs to the beneficiary.

To protect the beneficiary’s funds, the checking or savings accounts title must reflect the beneficiary’s ownership of the funds and your relationship as a fiduciary (financial agent). Neither the representative payee nor any other third party can have ownership interest in the account. The beneficiary must never have direct access to the account. Any account title (under state law) that shows beneficiary ownership of the account with you as fiduciary is acceptable. Do not use joint accounts. Here are two ways we
recommend to title the accounts:

* (Beneficiary’s name) by (your name), representative payee.”

* (Your name), representative payee for (beneficiary’s name).”

Your bank will provide help if you have additional questions.

An exception for parents who are representative payees
A common checking account for all family members living in the same household who receive benefits may show a parent as the owner of the account. Children’s savings, however, must be held in a separate savings account for each child, with the child’s name shown as the owner of the account.

Posted By: Elwood P. Dowd

Re: Representative Payee Account - 08/26/09 06:00 PM

The Guide for Representative Payees Brenda mentions does not discuss whether the bank can share information with the person under the disability. More to the point, it does not prohibit giving them information. So, it's up to you.

Personally, I see no justification for refusing to give the information to the person on whose behalf the payment is made - this person is not necessarily legally incompetent. It is the only way they would know if the funds are being misused. I can envision a number of circumstances where the inquiries could become a nuisance to the bank or to the representative payee, but it's a matter of weighing the drawbacks against one another.
Posted By: Bestaggs

Re: Representative Payee Account - 08/26/09 09:01 PM

I see there are two schools of thought out in cyberspace also. I have accessed the ssa.gov website and also saw the information there regarding the Rep. Payee.

My instincts are that the Beneficiary, as owner of the funds, has the right to the information.


Thank you all for your input.
Posted By: BrendaC

Re: Representative Payee Account - 08/26/09 10:14 PM

I based my personal opinion on experience in a retail banking environment, certainly not meant to be legal guidance. I have seen some ugly situations arise between beneficiaries and rep payees (as well as other fiduciary arrangements). If the bank gets in the middle, it can be a lose/lose situation. It just seems to work better to stay out of the situation altogether.

Also, SSA's info guide to beneficiaries seems to indicate that the payee should be the source of any account info:

What to do if you have problems with your payee
You and your payee should talk about how much money you receive from Social Security and how it is being spent on your needs. Then talk with your payee about how you want to use your money. If you cannot agree on how to spend your money, contact Social Security.